India’s 5G spectrum auctions will “most probably” be held in February next year, Telecom Minister Ashwini Vaishnaw, said yesterday. Vaishnaw was speaking to PTI after the government announced a new reform package for the sector in an effort to tackle competition in the sector. He also said that the government may even be able to start the auctions in January. The Union Cabinet announced the new reform package alongside new production linked incentive (PLI) schemes for drone manufacturers and automobile companies in India. The relief package for the telecom sector could help stressed companies like Vodafone, which have been struggling to battle low revenues in the sector. India is one of the cheapest markets in the world in terms of telecom costs for consumers.
The Indian telecom sector has been working to build 5G infrastructure in the country for over a year now. While the networks were expected in 2020, they have been delayed due to lack of readiness both from the government’s side and from companies. The government had earlier cleared companies like Airtel and Reliance Jio to conduct tests of their 5G infrastructures in order to prepare for upcoming auction sales. Most estimates suggest that the country will start seeing 5G infrastructure rolling out from late 2022.
On Wednesday, the Union Cabinet announced what has been called a “blockbuster reform” package for the sector. It includes a four-year break for companies to pay their statutory dues and the government is also permitting them to share airwaves amongst each other. Vishnaw said that the reform package would be “good enough for ensuring competition” in the sector. He also said that more companies will enter the space with some more changes that are in the pipeline. The new norms also allow companies to shift users from postpaid to prepaid connections, or vice versa, without going through the KYC process again.
Experts have also suggested that the sector may face possible monopolies in future. At the moment, Airtel and Reliance Jio are the top two telecom players in the country, while Vodafone-Idea has been struggling with heavy arrear payments and other issues. Many fear that the lack of competition in the space might eventually raise costs for consumers, and make it more difficult to meet the government’s plans to build a ‘digital India’.